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On the drivers of eco-innovations: Empirical evidence from the UK

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  • Kesidou, Effie
  • Demirel, Pelin

Abstract

The environmental economics literature emphasises the key role that environmental regulations play in stimulating eco-innovations. Innovation literature, on the other hand, underlines other important determinants of eco-innovations, mainly the supply-side factors such as firms’ organisational capabilities and demand-side mechanisms, such as customer requirements and societal requirements on corporate social responsibility (CSR). This paper brings together the views of these different disciplines and provides empirical insights on the drivers of eco-innovations based on a novel dataset of 1566 UK firms that responded to the Government Survey of Environmental Protection Expenditure by Industry in 2006. By applying the Heckman selection model, our findings indicate that demand factors affect the decision of the firm to undertake eco-innovations whilst these factors exhibit no impact upon the level of investments in eco-innovations. Hence, we suggest that firms initiate eco-innovations in order to satisfy the minimum customer and societal requirements, yet, increased investments in eco-innovations are stimulated by other factors such as cost savings, firms’ organisational capabilities, and stricter regulations. Based on a quantile regression analysis, the paper offers interesting insights for policy makers, by showing that the stringency of environmental regulations affects eco-innovations of the less innovative firms differently from those of the more innovative firms.

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Bibliographic Info

Article provided by Elsevier in its journal Research Policy.

Volume (Year): 41 (2012)
Issue (Month): 5 ()
Pages: 862-870

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Handle: RePEc:eee:respol:v:41:y:2012:i:5:p:862-870

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Web page: http://www.elsevier.com/locate/respol

Related research

Keywords: Eco-innovations; Environmental regulations; Organisational capabilities;

References

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Citations

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Cited by:
  1. Ghisetti,Claudia & Marzucchi,Alberto & Montresor,Sandro, 2013. "Does external knowledge affect environmental innovations? An empirical investigation of eleven European countries," INGENIO (CSIC-UPV) Working Paper Series 201301, INGENIO (CSIC-UPV), revised 23 May 2013.
  2. Pelin Demirel & Effie Kesidou, 2012. "Stimulating Different Types of Eco-Innovation in the UK: Government Policies and Firm Motivations," STPS Working Papers 1203, STPS - Science and Technology Policy Studies Center, Middle East Technical University, revised May 2012.
  3. Marin, Giovanni, 2014. "Do eco-innovations harm productivity growth through crowding out? Results of an extended CDM model for Italy," Research Policy, Elsevier, vol. 43(2), pages 301-317.
  4. Doran, Justin & Ryan, Geraldine, 2014. "Eco-Innovation – Does Additional Engagement Lead to Additional Rewards?," MPRA Paper 52797, University Library of Munich, Germany.
  5. Doran, Justin & Ryan, Geraldine, 2012. "Regulation and Firm Perception, Eco-Innovation and Firm Performance," MPRA Paper 44578, University Library of Munich, Germany.
  6. Azevedo, Susana & Cudney, Elizabeth A. & Grilo, António & Carvalho, Helena & Cruz-Machado, V., 2012. "The influence of eco-innovation supply chain practices on business eco-efficiency," MPRA Paper 42704, University Library of Munich, Germany.

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